The Interaction of Private and Public Governance: The Case of Sustainability Standards for Palm Oil

Abstract

By providing insights into the interaction between private-driven and public-driven governance initiatives in the context of the “Roundtable of Sustainable Palm Oil” (RSPO) and the “Indonesian Sustainable Palm Oil” (ISPO), this article sheds new light the interaction between private and public governance. It investigates how the relationship between the RSPO and the ISPO evolves over time and who and what drives this evolution. While the interaction between these standard schemes has initially largely been characterized by competition, it has become more collaborative and also coordinated in nature. This article argues that the experimentalist architecture of palm oil governance has fostered mechanisms for coordination across public and private certification schemes and has helped to join up the separate components of the regime complex through productive interactions. At the same time, several gaps and challenges remain, especially in light of the different interests of the multiple public and private actors involved in palm oil.

Multiplicity of sustainability standards and potential trade costs in the palm oil industry

“…It means that producers undergo multiple certification processes and make different labeling to separate logos or sustainable brands. This result is aligned with Brandi (2020), who argues that many standards in the palm oil industry create multiple costs of compliance for participants to comply with the same standards for different target markets. Second, there are no recognition and harmonization actions between SS schemes.…”

“…It can also be observed that public standards have taken advantage of benchmarking cooperation strategies. For example, in 2021, the ISPO launched a new strengthened standard for its adopters to have better possibilities of accessing international markets (Brandi, 2020; GAPKI, 2021; Kehati Foundation, 2021). Similarly, the MSPO's Secretariat informed that the MSPO–ISCC study results would be used to strengthen MSPO Principles and Criteria, including a system to harmonize the requirements under the ISCC scheme shortly (MSPO Secretariat, 2020).…”

“…For example, in 2021, the ISPO launched a new strengthened standard for its adopters to have better possibilities of accessing international markets (Brandi, 2020;GAPKI, 2021;Kehati Foundation, 2021). Similarly, the MSPO's…”

“…On the other hand, we also see two efforts from the ISPO, which is positive since it is carried out with northern actors such as the SPOI and the RSPO. Based on this strategy, the ISPO has benefited by incorporating new requirements that previously did not count as requirements on high conservation values (Brandi, 2020; ISPO & RSPO, 2015).…”

Importance of standardization and sustainability approach for higher biodiesel blends implementation

“…There are two palm oil industry certifications implemented in Indonesia, Indonesia Sustainable Palm Oil (ISPO) and Roundtable Sustainable Palm Oil (RSPO). ISPO is developed by Indonesia and recognized in the domestic market, while RSPO is initiated by Europe and is more internationally accepted [32]. As shown in table 2, ISPO is mandatory for palm oil plantations, mills, and integrated plantation mills.…”